The current public debate over the relative merits of Labour’s emissions trading scheme (ETS) and National’s scheme is not getting us anywhere. We’re arguing about the difference between quite useless and rather useless.
Because the fact is, as a means to address climate change by reducing greenhouse gas emissions, the ETS approach is wholly ineffective. And not only is it ineffective, it is unjust as well.
The climate crisis we face is of such a scale that we can’t afford to wait years for empirical data to show us that ETSs are fatally flawed. We have to break out of the ETS mindset right now. So, what I’ve done here is describe some of the problems with ETSs in the hope that it clears the space for another debate to begin – what approach will actually make real and just progress on reducing greenhouse gas emissions.
There is a lot of analysis of the weaknesses of ETSs around the web and some of the best comes from Larry Lohmann (here).
Some of his observations are as follows:
1. Emissions markets do not encourage the development of low or zero emission technology. The market focus on economic efficiency dictates that the purchase of permits will be preferred to expenditure on research and development, structural shifts in public investment, redirection of subsidies away from fossil fuels, and other measures.
2. The science, technology and enforcement required for an extensive emissions trading scheme is not available, even in industrialized countries. That opens the way for Enron-level scams.
Underlining the potential for scams, Rachel Morris in June 2009’s Mother Jones magazine (here) describes the consequences of the US getting into carbon trading: within 5 years a $2 trillion derivatives market in which carbon credits will be “securitized, derivatized, and speculated by Wall Street like the mortgage-backed securities market.”
These incentives for profiteering will exacerbate the worst aspects of ETSs that are already visible in so-called offset projects.
In such projects, developing nations are becoming a ‘carbon dump’ for the industrialised world, as communal land is enclosed and converted to exotic forestry or occupied by windmills, and as rivers that have been used sustainably by local communities for generations are dammed for hydro schemes. See, for example, Tamra Gilbertson’s devastating photo essay here.
In May 2008, in response to the worsening injustices, 39 climate justice groups published a statement indicting carbon trading and offset schemes as the “false solutions” of “a new 21st century phase of colonialism” (here).
The conclusion is plain enough: we must stand in solidarity with the climate justice movement and oppose false solutions. It’s time to reject the ETS approach and lead the debate toward the real and just answers to climate change.